Maker
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MKR · 1w

Is this a Sound Strategy?

Let's say you provide some Eth collateral to the maker protocol to mint some Dai. After you submit your collateral your Eth gets put into a pool called PEth. Now say a person defaults on their loan/mint and their collateral gets liquidated imposing a 13% penalty fee. 10% of that fee transfers to the PEth (pooled Eth) and burns off. Now you have a ratio of collateralized Eth being larger than PEth, ergo the price of PEth will be higher because there is less of it. So if a person was to somehow plan or know that many were going to default on their Dai minting, then you could hypothetically time to pay back your own Dai and the stability fee and get back extra Eth due to PEth being burned off. How the heck could you time something like that though?
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